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The Digital Telco: Engineering a Winning Customer Experience

Engineering a winning customer experience.

If you have walked the corridors of a telco in the past decade, you are familiar with the term “digital transformation.” As revenues from core, traditional services come under pressure, CSPs are investing millions to digitally transform their businesses. But what is digital transformation, anyway? According to Wikipedia:


“Digital Transformation is the use of new, fast, and frequently changing digital technology to solve problems often utilizing cloud computing, reducing reliance on user-owned hardware but increasing reliance on subscription-based cloud services.”

However, this definition is too one-dimensional and therefore lacking. It addresses digital as if it is a matter of technology alone. Therefore, in this article, we would like to deal with “digital” and its three key pillars: the Digital User, Digital Operations and Products, and Digital Customer Experience.


The Digital User: More Empowered Than Ever

Over the past two decades, the balance of power has shifted. Shaped by the standards of telco and other consumer-focused disruptors, today’s consumers demand immediacy, availability, and convenience. The consumer has changed, evolved, and shaped into a new type of consumer — the digital user. This user should be at the core of any digital strategy. And this is the main reason for any journey telcos execute and the main driver requiring change. It is the digital user for whom digital products, services, and experiences are designed, built, and served.


Driven by the growing penetration of fast mobile internet, all areas of life have become digitized or strongly influenced by digitalization. Boundaries have fallen, and proximity is no longer a constraint. We connect, communicate, play, and work — online.


Additionally, there is hyper-personalization of everything: Facebook, Amazon, Apple, Netflix, Google (FAANG), and like companies mine insights from huge amounts of data to deliver elevated experiences and better products and services. Today’s consumers expect nothing less from the service providers they interact with. Be it the local grocery store or government institution — they all need to match the expectations of the digital user: know me, anticipate my needs, and serve me accordingly. Otherwise, I will find others that do.

When building your digital strategy — designing your digital services and products and evaluating and perfecting your digital customer experiences — telcos need to start here — from understanding the digital user.



Digital Operations And Products

For the brave who embrace the challenge, it is not a threat but a huge opportunity. Opportunities, to be precise, because there is no single, “right” approach to digital services and products — as can be learned from innovative CSPs.


One such approach is the over-the-top (OTT) ecosystem approach, such as the one Turkcell has taken over the past couple of years. Turkcell’s vision, to become their customers’ digital lifestyle partner, has taken shape in the form of a comprehensive set of apps — from messaging and cloud storage to music and video streaming, their own proprietary search engine, and more. Some are developed in-house, others are acquired, and others are probably partnered or white-labeled.

One might argue that going against the world’s largest OTTs has a limited chance of success. But for Turkcell, which reported 55% digital revenue growth in its core market in 2018 — it proved to be a positive move. It is a two-fold strategy also. From a B2C perspective, it allows the operator to increase its digital footprint, customer engagement, and brand affinity while also reducing churn.

The OTT ecosystem approach further provides the operator additional monetization opportunities for the data flowing in its pipes — from digital advertising to data exchange. And for Turkcell, there is also an extra layer. They export their OTT ecosystem and acquired knowledge and experience through a set of partnerships with CSPs globally.


But creating an OTT ecosystem is only one of the product strategies available to daring CSPs. For NTT Docomo, being a customer’s “Smart Life Partner” is about leveraging its digital platforms alongside its trusted brand to engage with customers and prospects in a continuous, more meaningful way. By offering a broad range of services and products, from e-commerce to fintech and healthcare, NTT Docomo’s digital strategy is essentially about horizontal diversification.

NTT Docomo is not alone in that space: COSMOTE Greece sells insurance products as an aggregator, Megafon Russia sells toys and consumer electronics in its online shop, Globe Philippines sells apparel, and American Movil’s Claro runs an eCommerce marketplace.


Vodafone’s digital lifestyle partner strategy focuses primarily on the consumer internet of things (IoT): connected family, home, car — connected everything. By offering connectivity, home network management, and smart device management, Vodafone deepens its household penetration and affinity. As a result, it becomes a meaningful member of the household. The smart appliances sold by Vodafone are mostly OEM devices you can buy for less on AliExpress or eBay. But under “V by Vodafone” branding, consumers receive the additional guarantee of quality and experience.

Digital services strategies are not limited to the consumer segment, of course. Vodafone Turkey offers its small business customers consulting and support services to digitally transform their operations, commerce, and marketing. By doing so, Vodafone Turkey helps its customers to compete in today’s digital arena.


The types of digital products and services available are vast. Telcos simply need to pick one of the many options, or invent one and execute. The option CSPs cannot choose is not to adopt a digital product and services strategy.

And what about self-service apps, which is probably the first association that pops up when talking to telcos? These also fall under the category of digital products and services. And views differ on how comprehensive or simple and intuitive such apps should be.


Should they be like a Swiss Army knife, such as Airtel’s India app that features a wealth of options — from account management to mobile banking and content? Or should they be a plain, self-care, informational, and management tool? Both approaches are valid, provided the customer experience is managed and optimized. But when it comes to digital customer experience, it is not about an app or a website. Digital customer experience is about the overall business process and enablers — customer-facing or back-office — and how digitized they are.


Digital Customer Experience

PROCESS & SERVICE UNIFICATION

Customer experience is the sum of all customers’ interactions with a brand, its products, and services. To define “digital customer experience,” some add “digital” to “interactions” in the above definition, but it really isn’t so. Today, there is no real separation between physical and digital. On the contrary — the digital and the physical merge.


Customer journeys hop interchangeably between digital and physical touchpoints. If the interface is human-assisted, but the underlying processes and enablers are digitized — that’s a digital customer experience. And vice versa: if you booked your flight tickets online in a fully digitized process and missed your flight because the rescheduling notice was sent via standard mail (and that’s a true story) — there is nothing digital about this customer experience.

When we consider the “sum of all customers’ interactions,” our evaluation goes in four plains: product quality and market fit, convenience of sales, ease, and availability of services, and proactive resolution.


From a product point of view, there are various ways to achieve high quality and good market fit. One such method is the design-led approach, aiming to solve the equation for the human need rather than the business or “market” need. Such an approach applies, by the way, not only for products but also for services, business processes, and even marketing practices.


The design-led approach, or “design thinking” as it is commonly referred to, is an iterative process that starts with an empathic understanding of a challenge or a need in the human context. It is then followed by profound research and observation, aiming to define the importance of the solution. Such a process requires the inclusion of the various product and service stakeholders, brainstorming ideas, and never stopping at the obvious. After shortlisting the ideas, a few select candidates are prototyped and experimented, implemented, and tested — repeating the process as needed.


In today’s OTT space and multi-screen consumers’ habits, cross-device experience is key for elevated customer experience. When we take this in the context of telco, we should probably refer to customers’ cross-channel experiences. Yet, the same three C’s that apply to cross-device experience apply here as well: consistency, continuity, and complementary.


There is nothing more frustrating than going through a dozen interactive voice response (IVR) prompts to get to a rep and have to explain everything from the beginning. The three C’s are a means for delivering a frictionless, effortless experience. Customer Effort Score (CES) becomes a broadly accepted customer experience metric and a leading indicator for customer loyalty, gradually taking over the place of Net Promoter Score (NPS).



ENABLERS

While the definition of “digital transformation” above focuses on the enabling technology, this term can be seen in a broader context. It is evident that enabling technology is a must for any digital customer experience. For example, applying a data-driven approach to analyze and optimize customer experience requires the tools to collect, process, and analyze the data.

Solid infrastructures are crucial for delivering a great digital customer experience across the value creation chain, including network coverage, availability, and quality of services (QoS), cloudification of BSS and core functions to support agility and business continuity, enterprise resource planning (ERP) to support process automation and simplification, customer data management (CDM) and analytics, and customer relationship management (CRM) and channel orchestration.

Yet, to keep pace with the faster-than-ever evolving consumer expectations, CSPs must continuously and proactively seek new, disruptive technologies to put them at the forefront of the digital experience. Dutch operator Vodafone-Ziggo, for example, realized that with 5.2 million technical assistance calls per year, it was challenging for agents to provide remote assistance over the phone. This resulted in numerous, costly technician dispatches.

By partnering with TechSee, which provides augmented reality (AR) and an AI-powered remote assistance platform, Vodafone empowered its customer support agents to become virtual technicians. Vodafone-Ziggo has cut costs due to 26% fewer technician dispatches and gained a 10 point customer satisfaction increase and improved employee experience by implementing this innovative solution.


The Future Is Now

The digital telco revolution is far from relying solely on the adoption of digital technology. The focus of CSPs’ digital transformation agenda should be on the digital user: their interests, behavior, lifestyle, and needs. Only by understanding and anticipating digital users’ needs will telcos be able to design the digital products and services that fit their audience and provide their customers with an experience that matches their expectations.

 

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